The
short lived economic boom of the 1990s brought in a wave of
self-congratulatory praise on the part of neoliberal partisans. We had
entered a “new economy”, where serious recessions were a thing of the past
and the development of technology provided limitless possibilities for
workers to obtain high paying skilled positions. The stock market was on an
unswerving ride up to hitherto unimaginable peaks, and the trend would (of
course) only continue. Furthermore, underdeveloped nations that would just
follow the neoliberal prescriptions and kneel down obediently to the law of
the market would surely experience similar growth—eventually.

With the
loss of 2.7 million jobs in the USA and the economic collapses in nations
that most openly embraced the neoliberal program, we are now presented with
quite a different picture, one as bleak and miserable as the proclamations
of the 1990s were saucy and untouchable. Inevitability and invincibility in
the success of the market have given way to uncertainty and an anxious
pessimism.

In his
new work, Naming the System: Inequality and Work in the Global Economy,
radical economist and labor educator Michael D. Yates attempts to illustrate
the reality of the post-1990s-boom global capitalism for the people of the
world. He debunks the myths of the “new economy”, showing how the major
problems we see in the world today—once dismissed by neoliberal advocates as
a thing of the past—are in fact inevitable byproducts of the capitalist
system. In doing so, he paints a compelling picture—pillared by up-to-date
facts and trends and personal stories—of the miserable reality that
capitalism has rendered for the majority of the world’s inhabitants. If
these facts and illustrations weren’t enough to discredit the reigning
economic system, Yates in turn uses them, as well as the basic tenets of
radical economic theory, to issue a scathing critique of neoliberalism.

While it
would be impossible to lay out all of the essential points in this very
important and timely study, I can touch on some, allude to others, and urge
everyone to grab the book as soon as they can.

Yates
states early on what his three main goals are with Naming the System.
“The first goal”, he writes, “is to give readers a good understanding of
the capitalist world economy and the position of workers within it” (28).
The majority of the book deals with fulfilling this first goal.

The first
half of the book discusses specific features of the dim reality that
capitalism has imposed globally on the people. Chapter 2 delves into a
discussion of inequality both within and among nations, and on the global
scale. Neoliberal economists pride themselves on their theory that, if the
market is permitted to work its magic, the inequality gap between nations
will shrink over time. While this may be the case in abstract models and
academic theories, it has been anything but the truth in reality. As Yates
tells us, using the valuable report of ex-World Bank economist Lant
Pritchett, the gap between rich and poor countries actually grew formidably
between 1890 and 1960. Furthermore, the wealth of rich and poor nations has
continued to diverge since the 1960’s—and during the bulk of this period it
was the neoliberal model which dominated international economics.
Additionally, this divergent trend between rich and poor has been the
reality here in the USA, where for the past three decades our ruling class,
aided by aggressive state policies and actions, has been voraciously
pursuing every method to shift wealth further from the working class and
public sector into their own hands.

If one
abides by true principles of justice and democracy, any more inequality in a
world already so polarized as ours is a repulsive trend. Nevertheless, it
could be argued that a growing inequality is not necessarily harmful, as
long as the tide lifts all boats. Naturally, this is the excuse
neoliberalists fall back upon. Yates confronts this glib rationalization. He
draws on recent studies that illustrate “that inequality, in and of itself,
has harmful social consequences” (59). Besides the obvious fact that the few
who benefit from inequality will have enormous advantages and opportunities
from the get-go, a growth in inequality has many negative social
consequences. Yates draws on a important study which observed that those
states in the USA with greater inequality in turn have higher levels of
mortality, sickness, incarceration, and unemployment; a higher percentage of
people without health insurance and needing food stamps; less spent per
person on education and less books in schools, accompanied by poorer
educational performances; and higher rates of low birthrate, violent crime,
tobacco use, and inactivity. As Yates observes, “[i]t seems that the
psychological damage done to poor people as they contemplate the gap between
themselves and those at the top of the income distribution has an
independent effect on a wide variety of individual and social health
outcomes” (60).

After
dealing with inequality, Yates moves on to a many-sided discussion of the
reality of work for the most of the world’s inhabitants. In chapter 3 Yates
discusses capitalism and unemployment. While it is indeed true that
unemployment is epidemic in the most of the world, this doesn’t begin to
tell the whole story. Official unemployment accounts omit vital statistics
and groups that paint a clearer picture of the reality of employment. People
who have not actively sought after a job four weeks prior to an unemployment
survey, laborers who involuntarily work part time due to capitalism’s
failure to provide them with fulltime work, those who involuntarily perform
informal or unofficial labor—all this doesn’t figure in to official
accounts. Thus, a much more accurate picture is given when we use
underemployment as our criteria—the number of people without official,
fulltime work. This more accurate view of employment is vital in a period
like ours where an intensified globalization is rendering millions of
people, often former rural inhabitants, to the wretched existence of the
underemployed. According to the United Nation’s International Labor
Organization, more than one billion people today worldwide are in the ranks
of the underemployed.

Contrary
to neoliberal myths about the growth of skilled jobs primarily located in
technology, the work that most of the world does is anything but highly
skilled, creative, and providing of opportunities. Yates illuminates the
three main trends of work in capitalist economies. First, fewer and fewer
people are employed in agriculture. The result is that, as former rural
workers are pushed into the cities, there is an enormous growth in the
surplus labor force in the metropolises of underdeveloped countries. Thus,
in countries that comprise the majority of the world’s population—China,
India, Mexico, Brazil— underemployment is rampant, with mountains of
“not-in-the-labor-force labor” that can’t be organized in traditional ways.
This surplus of labor, combined with the prevalence of child labor, the
growth of women in the labor market (Yates’ second trend of work under
capitalism), and the relentless incentive for corporations to simplify the
labor process, keeps “jobs designed to stay low paid”.

The third
and last trend that Yates mentions is the universal shift from the
production of goods to the production of services. Indeed, four fifths of
the labor force in the USA is now engaged in this type of labor. This global
trend has been fueled by the growth of technology, the movement of
production to low wage poor nations, and the growth of consumer spending in
rich nations. It is essential to come to grips with this changing reality of
the labor force (indeed, all these changing realities of the labor force),
especially since they differ from more classical—and simple—schemes of the
working class and the class struggle. In chapter 4 Yates also lays out some
revealing facts and analysis of the reality of labor in the USA. By looking
at the occupations with the largest employment (predominantly service sector
jobs, naturally) we see that the majority of jobs in the USA are not only
tedious and difficult, but astonishingly low-paying. This is vital reading
for radicals in the USA.

This
eloquent presentation of major statistics and trends in global capitalism
that covers most of the first half of Naming the System facilitates Yates’
second goal in writing the book. He hopes to “stimulate readers to find out
more about the global economy, especially about the billions of workers
whose labor makes it function”(29). Indeed, by learning about the reality
and trends in the realms of employment, quality and type of work, the
increasing role of women in the workforce, and so on, one is presented with
the challenge—and necessity—to further pursue an understanding of these
phenomena, if only for the reasons that any serious attempt to change the
world must confront this reality, which differs in important ways from
classical notions. As we see later on, there are movements that are
attempting to struggle within these new conditions—often successfully.

There are
two great things about Yates’ writing style. First, he has a remarkable
ability to express extremely complex phenomena in the simplest of words,
while at the same time retaining the power and logic that makes the ideas so
powerful. With many academics often communicating in such a way that only
increases the intimidation of economics and Marxist theory, Yates is a
welcomed relief. He eschews fancy formulations and excess verbal baggage to
cut to the core of the issue. As his case is progressively laid out one
finds him or her self ever more confident in grasping the real problems of
the world. This is a great source of empowerment for readers, a clear
demystification of the capitalist system.

The
second great thing about Yates’ writing style is his smooth weaving back and
forth between theoretical discussion and mountains of compelling evidence,
including snippets of real, often moving stories that bring his arguments to
life. Whether illustrating the plight of Pakistani child laborers and South
Asian sex workers, describing the misery of poultry and sweatshop garment
workers, or exposing the idiocy of ex-Secretary of Labor Robert Reich (whom
he debated), Yates’ humble words radiate an informed fury over capitalism’s
calculated ruining of human lives. With this cumulative layering of simple
(and simply-put) statistics, theoretical arguments and criticism, and real
stories, the reader is presented with a fully rounded picture of the system
Yates is exposing.

In
chapters 5 and 6, Yates moves on to a more theoretical confrontation with
neoliberal economics. In these chapters he successively posits the basic
tenets of neoliberal thought and introduces a general criticism in the form
of radical economic theory—also known as Marxism.

As Yates
points out, “in neoclassical economics, the individual is the primary unit
of analysis. Society is seen as the sum of the individuals in it; social
outcomes are the result of the decisions made by individuals.” (120).
Further, “the primary assumption of neoclassical economics is that all
persons act out of self-interest” (121). According to neoliberal wisdom, if
the market is given free reign to manifest its fruits, and individuals stand
unfettered in the pursuit of their self-interest, the results will be
desirable: greater equality, wealth, and living standards for all. While
proponents of capitalism may disagree on subordinate questions such as the
role of the state, they all “share a faith in the goodness of markets”
(133).

However,
almost all evidence and data fly in the face of neoliberal postulates. As
Yates writes earlier on: “[T]he data on world poverty and unemployment make
it difficult to maintain that a more global economy has done and more
dependent upon economic forces over which they have no control. Neither in
the poor nor the rich nations has globalization, and the new economy of
which it was a critical element, created a large class of skilled workers
who could anticipate years of high pay and intense employer competition for
their services” (22).

Further,
neoliberal thought has no real explanations for the pervasiveness of
inequality and poverty, unemployment and underemployment, and the utterly
alienating work life that capitalism imposes on most people. Neoliberal
prescriptions have meant more inequality, more poverty, more austerity, more
alienation. How is it that a theoretical system which rests on such faulty
assumptions, that bears no relation to real trends, be so dominant?

To answer
this Yates first makes a point about the early neoclassical thinkers. Unlike
today’s zealots, the founders of modern neoliberal thought, Adam Smith and
David Ricardo, were not driven to their conclusions by academic positions or
media notoriety. They were motivated by a deep desire to understand the
dynamics of the new system that was flourishing before their very eyes.
Hence, their ideas are filled are more pure, filled with many valuable
kernels of truth pertaining to the operation and dynamics of the capitalist
system. As Yates writes, “[Adam] Smith could see clearly the tendency,
inherent in the normal operation of the new system, for employers to find
ways to destroy their competitors and monopolize markets. Ricardo could see
clearly that profits are not a cost of production but a surplus”(159).

Advocates
of neoliberal policies today are not driven by the same, pure motives. Yates
conjures up such a scathing critique of the consequences of capitalist
reality that it is impossible for one to ascertain, let alone defend, that
this is somehow good for people. And still, our neoliberal cheerleaders
maintain a staunch confidence despite the cold verdict of reality. There is
only one conclusion to make of all this: “the fact that neoclassical
economics is so wrong yet so powerful tells us that it is not a science but
an ideology” (160). Indeed, it is an ideology, full of models and
prescriptions divorced from the interests of the majority of the world’s
people, based on defending an order that benefits the wealthy few while
consigning the rest to abject misery. We are reminded of Bertrand Russell’s
insightful words: “When you hear any body of men proclaiming lofty
principles, you should ask yourself: whose income is likely to be increased
by this “idealism?”

To this
neoliberal ideology Yates counterpoises an alternative: radical economic
theory. “From the perspective of radical theory, there is no such thing as
the society’s best interests, as neoclassical theory suggests. Rather, there
are class interests: those of workers and those of employers” (176).
Yates goes on to state further:

“What makes radical theory so different from
the neoclassical theory is that it is both historical in its analysis and
based upon the notion that classes rather than individuals are the best
theoretical building blocks. The neoclassical theory sets up a completely
abstract model of capitalism, devoid of any connection to reality, and then
proceeds to trace out the logic of this abstract model and make predictions
about the real world. In the process, most neoclassical economists seem to
lose sight of the difference between their model and the real world. They
say, in effect, that the real world must be made to conform to their model
if we are to reap all of the good consequences of an economy that operates
on the principles elucidated in the model. But they turn around and evaluate
real world phenomena as if we were actually operating in their model
economic world. They do not, for example, analyze an increase in the minimum
wage in the context of the actual world in which it occurs. Rather, they
examine this in the context of their model world. The fact that an increase
in the minimum wage leads to undesirable results in their model world is
given as evidence that it will do real harm in the real world. No wonder the
theory’s predictions do not test well. What the neoclassical economists have
is not really a scientific theory at all. They have an ideology, a belief
system that they use to evaluate the world” (187)

Expounding on radical economic theory, Yates
discusses the basics of Marxist political economy. In doing so he provides
answers to the ills of capitalism that neoliberalism fails to address, and
illustrates with great clarity how these ills are structurally produced and
tied to the capitalist mode of production.

The capitalist system has persisted through
world wars and severe depressions. It has accounted for the most tremendous
leaps in the productive capacity of human beings and has stimulated
unimaginable new vistas in creativity, science, and technological growth.
Moreover, it is a system that has managed to convince many of those who
benefit least from it that it is the only natural order. But, as Yates moves
on to discuss, capitalism is riddled with unsolvable contradictions,
built-in structural tensions that can’t be wiggled out of. Of these “chinks
in the god’s armor”, the most inescapable is the contradiction between the
freedom of the market and the “unfreedom” of work. While workers are free to
sell their labor power to whom they wish, they must nevertheless sell it to
survive. In doing so, they enter into a relationship where they have no
freedom over their time, what they do with it, and what is produced from it.
Moreover, this scenario is all the more nefarious: the worker’s labor, sold
to this or that capitalist, results in further enriching the exploiter in
the first place, strengthening their ability to exploit more. Given all
this, and given the fact that modern capitalism has shoved masses of workers
close together in large workplaces, it is only a matter of time until
workers collectively see the contradiction themselves.

Thus, reaching this summit, Yates closes the
book with an inspiring discussion of some of today’s struggles that are
combating capitalism in different ways. He sketches a brief picture of the
efforts of the anti-sweatshop movement at home to the struggle of the
“Poors” of South Africa, from the Teamsters for a Democratic Union to
guerilla efforts in Columbia and Nepal. While the global movement to resist
capitalism is still in its infancy, in need of much ideological
clarification, it is instructional to see the diverse ways in which
different people react to their oppression in their specific, local context.
As Yates says, “global movements must originate at the local level, the
level at which people actually experience life”. The task is to fuse these
local struggles into a powerful, coordinated attack on the big problem:
global capitalism. While some activists are confused or hesitant to target
this, it is objectively necessary. This is what Yates’ book is fundamentally
about: naming and knowing the system that is at the root of the problem.

Yates has one last goal in Naming the
System: “The third, and perhaps the most important, objective of this
book is to encourage people to take action to change the nature of the
economic system” (29). With a world spiraling into endless war and economic
uncertainty, where so many potentially beautiful lives are destroyed and
chewed apart by the daily grind of life in a capitalist world, it is up to
our generation to dedicate our lives to creating a real alternative. Let
Naming the System inspire us all to heed Yates’ words:

“I hope that after reading this book, people
in rich countries, normally so complacent, become angry enough to want to do
something about the deplorable conditions in which most people live. And I
hope that people in poor countries, already angry, become clearer in their
understanding about what are the causes of these deplorable conditions. I
hope as well that readers begin to see that their own lot in life is
terribly constricted by the economic forces unleashed by those with power
over them. In other words, what I hope for is an informed anger, one based
on an understanding of what is going on” (29)